2008 NOTMC Audit

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NEW ORLEANS TOURISM MARKETING CORPORATION (A Component Unit ofthe City of New Orieans) FINANCIAL AND COMPLIANCE AUDIT TOGETHER WITH INDEPENDENT AUDITORS' REPORT FOR THE YEAR ENDED DECEMBER 31,2008

Under provisions of state law, this report is a public document- Acopy of the report has been submitted to the entity and other appropriate public officials. The report is available for public inspection at the Baton Rouge office of the LegisiativeAuditor and, where appropriate, at the office of the parish clerk of court.

Release Date

runo &TervdU)n uj> 'Certified PubUc Accountants

JOJMH-

TABLE OF CONTENTS

PAGE

INDEPENDENT AUDITORS'REPORT.....

1

MANAGEMENT'S DISCUSSION AND ANALYSIS

4

STATEMENT OF NET ASSETS

10

STATEMENT OF ACTIVrnES

11

BALANCE SHEET - GOVERNMENTAL FUNDS

12

RECONCILIATION OF THE BALANCE SHEET-GOVERNMENTAL FUNDS TO THE STATBMENT OF NET ASSETS

13 .

STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE-GOVERNMENTAL FUNDS

14

RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCEGOVERNMENTAL FUNDS TO THE STATEMENT OF ACTTVmES ....

15

NOTES TO THE FINANCIAL STATEMENTS

16

TABLE OF CONTENTS (CONTINUED)

PAGE

REQUIRED SUPPLEMENTARY INFORMATION: Budgetary Comparison Schedule-General Fund Budgetary Comparison Schedule-Special Revenue Fund-CDBG

34 35

SUPPLEMENTARY INFORMATION: Schedule of Expenditures of Federal Awards

36

INDEPENDENT AUDITORS' REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS

37

INDEPENDENT AUDITORS' REPORT ON COMPLL\NCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLLWCE IN ACCORDANCE WITH OMB CIRCULAR A-133

40

SCHEDULE OF FINDINGS AND QUESTIONED COSTS

43

SCHEDULE OF PRIOR YEAR FINDINGS

45

JBruno& Tervalon LLP !d PubUc Accountants Member American institute of Certified Pubiic Accountants Society of l^uisiana Certified Public Accountants

Michaei B. Bruno, CPA Aicide J. Tervalon, Jr., CPA Waldo J. Moret, Jr., CPA Paul K.Andoh,Sr., CPA Joseph A.fikan\\,CPA

INDEPENDENT AUDITORS' REPORT

To the Board of Directors ofthe New Orleans Tourism Marketing Corporation (A Component Unit of the City of New Orleans) New Orleans, Louisiana We have audited the accompanying financial statements ofthe govemmental activities and each major fund of New Orleans Tourism Marketing Corporation (NOTMQ (A Component Unit ofthe City of New Orleans) as of and for the year ended December 31, 2008, which collectively comprise NOTMC's basic financial statements as Usted in the Table of Contents. These financial statements are the responsibility of NOTMC's management. Our responsibility is to express opinions on thesefinancialstatements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General ofthe United States.

Those standards require that we plan and perfonn the audit to obtain reasonable assurance about whether the financial statements arefreeof material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluatmg the overall fmancial statement presentation. We believe that our audit provides a reasonable basis for our opinions.

As discussed in NOTE 1, thefinancialstatements present only the activities of NOTMC and do not purport to, and do not. present fairly the fmancial position ofthe City of New Orleans, as of December 31,2008, and the changes in itsfinancialposition for the year then ended in conformity with accounting principles generally accepted in the United States of America.

4296 ELYSIAN RELDS AVENUE NEW ORLEANS, U 70122 (504)284-8733 FAX (504) 284-8296

6424 LAKEOVER RD., SUrPE A JACKSON, MS 39213 (601) 366-2344 FAX (601) 366-6440

INDEPENDENT AUDITORS' REPORT (CONTINUED)

To the Board of Directors ofthe New Orleans Tourism Marketing Corporation (A Component Unit ofthe City of New Orleans) New Orleans, Louisiana Page 2

In our opinion, the fmancial statements referred to above present fairly, in all material respects, the respectivefinancialposition of govemmental activities and each major fund of New Orleans Tourism Marketing Corporation, as of December 31, 2008 and" the respective changes in its fmancial position for the year then ended in conformity with accounting principles generally accepted in the United States of America.

In accordance with the Govemment Auditing Standards, we have also issued our report dated April 3,2009 on our consideration ofNOTMC's intemal control overfinancialreporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of intemal control over fmancial reporting and compliance and the results of that testing, and not to provide an opmion on the intemal control overfinancialreporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit.

The management's discussion and analysis on pages 4 to 9 and budgetary comparison information on pages 34 and 35 are not a required part ofthe basic financial statements but are supplementary mformation required by accounting principles generally accepted m the United States of America. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation ofthe required supplementary information. However, we did not audit the information and express no opinion on it.

jBruno& Tervalon LLP W^Certified Public Accountants

INDEPENDENT AUDITORS' REPORT (CONTINUED)

To the Board of Directors ofthe New Orleans Tourism Marketing Corporation (A Component Unit ofthe City of New Orleans) New Orleans, Louisiana Page 3

Our audit was conducted for the purpose of forming opinions on thefinancialstatements that coUectivelycomprisetheNOTMC'sbasic fmancial statements. The accompanymg schedule of expenditures of federal awards is presented for purposes of additional analysis as required

by U.S. Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations, and is also not a required part of the basic financial statements of NOTMC. The schedule of expenditures of federal awards has been subjected to the auditing procedures applied in the audit ofthe basicfinancialstatements and, m our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole.

BRUNO & TERVALON LLP CERTIFIED PUBLIC ACCOUNTANTS April 3,2009

JBruno& Tervalon LLP ^Certified Public :^ccotmtants

NEW ORLEANS TOURISM MARKETING CORPORATION (A Component Unit ofthe City of New Orleans) MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED DECEMBER 31,2008

New Orleans Tourism Marketing Corporation (NOTMC) is a component unit ofthe City of New Orleans. NOTMC's management's discussion and analysis is mtended to assist the reader in focusing on significant financial issues, provide an overview ofNOTMC's financial activity, and identify changes m NOTMC's financial position and its ability to address the next and subsequent year challenges. It also identifies any material deviations from the financial plan and identifies individual fimd issues or concems. This is a requirement of the Govemmental Accounting Standards Board Statement No. 34 (GASB 34) "Basic Financial Statements - and Management's Discussion and Analysis - for State and Local Governments" and is intended to provide the financial results for thefiscalyear ended December 31,2008.

The following is an illustration on how thisfinancialreport is presented.

MD&A Management's Discussion and Analysis (Required Supplementary Infonnation)

Basic Financial Statements Government-Wide Financial Statements Fund Financial Statements Notes to the Financial Statements

Other Required Supplementary Information Required Supplementary Infonnation

Supplementary Information

I

NEW ORLEANS TOURISM MARKETING CORPORATION (A Component Unit of the City of New Orleans) MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED DECEMBER 31,2008

As indicated m the illustration, GASB 34 requires the presentation of two basic types of financial statements: Govemment-Wide Financial Statements and Fund Financial Statements.

Govemment-Wide Financial Statements The govemment-wide fmancial statements provide a perspective of NOTMC as a v^ole. These statements use the full accmal basis of accounting similar to private sector companies. There are two govemment-wide statements: the Statement of Net Assets and the Statement of Activities.

The Statement of Net Assets combines and consolidates govemmental funds' current financial resources (short-tenn spendable resources) with capital assets and long-term obligations, regardless if they are currentiy available or not.

Consistent with the full accrual basis method of accounting, the Statement of Activities accounis for cunent year revenues and expenses regardless of when cash is received or paid. The intent of this statement is to summarize and simplify the user's analysis ofthe costs of various. NOTMC services.

Fund Financial Statements The fimd statements are similar to financial presentations of typical govemmental agencies, but the focus is on NOTMC's major funds rather thanfimdtypes as in the past. The fund statements are reported using the modified accmal method of accounting. Under this basis of accounting, revenues are recorded when received except where they are measurable and available and therefore represent resources that may be appropriated. Expenditures are accounted for in the period that goods and services are used. In addition, capital asset purchases are expensed and not recorded as assets. Debt payments are recorded as expenditures in the current year and fiiture debt obligations are not recorded.

NOTMC maintams two (2) individual govemmental funds. Information is presented separately in the govemmental fimd statements for the general fimd and the special revenue fimd Community Development Block Grant, which are considered to be major ftmds.

NEW ORLEANS TOURISM MARKETING CORPORATION (A Component Unit of the City of New Orleans) MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED DECEMBER 31,2008 Financial Analysis of NOTMC as a whole Summary Statement of Net Assets 2008

Assets Current assets Capital assets, net

Total liabilities Net Assets Invested in capital assets Unrestricted Total net assets

Qiaoss

$8,195,033 39.476

$(240,281) f7.872-)

8.234.509

^248.153')

743.363 51.313

1,372,410

(629,047) " 11.545

794.676

1-412.178

31,604 7.160.076

39,476 6.782.855

(7,872) 377.221

ÂŁ7.191.680

$6.822.331

ÂŁ 369.349

$7,954,752 31.604

Total assets Liabilities Cunent liabilities Long-t^m liabilities

2007

39.7$g

As indicated by the statement above, in 2008 total net assets are $7,191,680, which represents a 5% increase over 2007. In 2008, total assets, which consist of 99.6% in current assets and .4% in capital assets, decreased by 3% from $8,234,509 to $7,986,356.

Total habilities decreased by $617,502 or 44%, due to a decreased amount of marketing accounts payable at December 31,2008.

Invested in capital assets is a combination of coital assets at original cost less accumulated depreciation. The original cost of capital assets is $140,109, which is an accumulation of capital assets year after year less any capital disposals. The accumulated depreciation is the accumulation of depreciation expense since acquisition. In accordance with accounting principles generally accepted in the United States of America, depreciation expense is recorded on the original cost of the asset, less an estimated salvage value, expensed over the estimated usefiil life ofthe asset. Total accumulated depreciation is $108,505.

The remaining $7,160,076 in net assets is unrestricted. The unrestricted net assets balance is an accumulation of prior years' operating results. This balance is directiy affected by NOTMC's operating results each year.

NEW ORLEANS TOUMSM MARKETING CORPORATION (A Component Unit ofthe City of New Orleans) MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED DECEMBER 31,2008

Results of Operations

Revenues Base Funding-City of New Orleans Federal Grant Hotel/Motel Taxes RTA Hotel Taxes Casino City Lease Agreement Casino Hotel Agreement Other Revenue Interest Income Total Revenues

Expenses Provisions of Funding to Outside Agencies Special Events Marketing General and Administrative < Depreciation Total E^qjcnses Increase (decrease) in Net Assets

2008

2007

$1,000,000 3,810,609 3,738,410 2,499.152 1,000,000 1,000,000 141,701 97.291

$ 1,000,000 4,689,390 3.341,602 2,206,618 1,000,000 â&#x20AC;˘ 1.000,000 155,238 222.939

13587.1^3

13.615.787

Change $

-0(878,781) 396,808 292,534

-0-0(13,537) (U5.$4?) f328.624>

2,757,319 214.598 9,519,653 412.267 11321

2,481,918 155,000 9,314.110 368,614 21.3^4

275.401 59.598 205.543 43,653 (7.377^

12.917.814

]i?.340,??6

576.818

$ 369.34?

$f9Q5.442^

Changes in NOTMC's revenues are reflected in the statement above. In 2008, total revenues decreased by $328,624 or about 2%, wliich is primarily due to a combination of less federal Community Development Block Grant funds and more tax revenues. Overall expenses mcreased by $576,818. This increase in expenses is primarily due to an increase in Hotel/Motel and RTA Taxes Revenues, which directiy resulted m an increase in distributions to outside agencies and a new marketing campaign. The above statement ^ o w s how the $905,442 decrease m net assets occurred for 2008.

A significant portion of revenues is provided from hotel/motel taxes and RTA hotel taxes. In 2008, hotel/motel taxes and RTA hotel taxes totaled $3,738,410 and $2,499,152, respectively, which were each higher than 2007 due to an increase in tourism during the period. See Note 4 to the financial statements for fiirther discussions ofthe sources of NOTMC*s revenues.

NEW ORLEANS TOURISM MARKETING CORPORATION (A Component Unit ofthe City of New Orleans) MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED DECEMBER 31,2008

Financial Analysis ofthe Govemmental Fund The focus of govemmental funds is to provide infonnation on near-term inflows, outflows, and balances of spendable resources. Such mformation is useful m assessmg NOTMC*s financmg requirements. In particular, unreserved fimd balance may serve as a useful measure of a government's net resources available for spending at the end ofthe fiscal year.

At the end of tiie December 31, 2008 fiscal year, NOTMC's general fund reported ending unreserved fund balance of $7,211,389. an increase of $388,766 in comparison to the prior year.

Of the unreserved fund balance, the Board of Directors has designated the following for subsequent year's expenditures and other uses: Purpose

Amount

Various media costs 2009 admmistrative costs Broadcast projects and special promotions Reserve for administrative costs Reserve for emergency marketing costs

$1,100,000 45,000 850,000 1,500,000 2.000,000

Total

$5.495.000

The remainder ofthe imreserved fimd balance is undesignated.

Capital Assets At December 31, 2008. NOTMC has $31,604 invested mfiimitureand equipment.

Assets Fumiture and equipment Less accumulated depreciation Net capital assets Depreciation expense for the year is $ 13.977.

2008

2007

$ 140,109

$134,004

(108.505'^ $ 31.604

(94.528*)

NEW ORLEANS TOURISM MARKETING CORPORATION (A Component Unit ofthe City of New Orleans) MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED DECEMBER 31,2008

Economic Factors and Next Year's Budget The major factor affecting the budget is the economy and its effect on the tourism industry. The NOTMC's budget is greatiy affected by the amount of tax revenues received fiom the Hotel/Motel Occupancy Privilege Tax and RTA Hotel Tax. The world clunate relating to public safety and homeland security also influences the consumer's confidence in the travel industry.

New Orleans has fared well during past times of economic crisis and NOTMC will continue to be conservative in its estimations in order to reduce any possible financial vulnerability.

Budget As required by state law, the Board of Directors of NOTMC adopts the original budget of NOTMC prior to the commencement ofthe fiscal year to which the budget applies. NOTMC is permitted by state law to amend its budget anytime during the fiscal year prior the end of fiscal to which the budget applies. NOTMC did not amend its 2008 original budgets.

Revenue Budgets NOTMC's actual general fimd revenues of $9,476,554 were more tiian the budget by $976,199, a variance of 11%. The actual special revenue fund - CDBG revenues of $3,810.609 were more tiian the budget by $160,609.

Expenditures Budgets NOTMC's actual general fimd expenditures of $9,087,788 were less than budgeted expenditures by $162,567 or 2%. The actual special revenue fimd - CDBG expenditures of $3,810,609 were more than budgeted expenditures by $160,609.

Contacting NOTMC Financial Management Thisfinancialreport is designed to provide citizens, taxpayers, customers, investors and creditors with a general overview of NOTMC's finances and demonstrate NOTMC's accountability for money it receives. If you have questions about this report or need additional information, contact Ms. Sandra S. Shilstone, President & CEO, New Orleans Tourism Marketing Corporation, 365 Canal Street. Siute 1120. New Orleans, LA. 70130.

NEW ORLEANS TOURISM MARKETING CORPORATION (A Component Unit of the City of New Orleans) STATEMENT OF NET ASSETS DECEMBER 31.2008

GOVERNMENTAL ACTIVmES ASSETS Current Assets: Cash (NOTES 2(F) and 3) Hotel/motel taxes receivable RTA hotel taxes receivable Base fiinding receivable Other receivables Prepaid expenses

$6,516,968 548,669 544,362 250,000 94,553 ' 200

Total current assets

7.954.752

Noncurrent Assets: Capital assets (NOTE 5) Less accumulated depreciation (NOTE 5)

140,109 flOS-SOSt

Total noncurrent assets

31.604

Total assets

7.986.356

LIABILrriES Current Liabilities: Accounts payable and accrued expenses

129,956

Due to outside agencies, net (NOTE 11)

- 613.407

Total current liabilities

743.363

Noncurrent liabilities: Compensated absences (NOTE 6)

51.313

Total liabilities

794.676

Invested in capital assets Unrestricted Total net assets

31 604 . 7.160.076 $7.191.680

NET ASSETS

^

The accompanying notes are an integral part of these financial statements.

10

NEW ORLEANS TOURISM MARKETING CORPORATION (A Component Unit of the Cltj' of New Orleans) STATEMENT OF ACTIVITffiS FOR THE YEAR ENDED DECEMBER 31,2008

Expenses FUNCTIONS Governmental Activities: Provision of funding to outside agencies (NOTES 7 AND 11) Agency and related fees Summer/general media Multicultural/Essence events Production Public relations Research Telemarketing Christmas media Interactive marketing Summer/museums media General and administrative Fulfillment Promotions/festival support Unallocated depreciation Special events Summer convention

Program Revenues Operating Grants and Contributions

2,757,319 1,035,119 4,241,932 342,843 754.514 664.128 140.820 4,113 473,916 1.268.356 218,000 412,267 120,912 100,000 13.977 214.598 155.000

Total

izsiim

$

-0-0-

3,089.931

-0560.348

-0â&#x20AC;˘0-0-0-0160,330

-0-0-0..0-

-0-0-

umos.

General Revenues: Basefimding- Ci^ of New Orleans (NOTE 4) Hotel/motel taxes (net of collection fees) (NOTE 4) RTA hotel taxes (NOTE 4) Casino City lease agreement (NOTE 4) Casino hotel agreement (NOTE 4) Other revenue (NOTE 4) Interest income

Net (Expenses) Revenues and Change In Net Assets

$(2,757,319) (1.035,119) (1.152,001) (342.843) (194.166) (664,128) (140,820) (4,113) (473,916) (1.268,356) (57.670) (412.267) (120.912) (100.000) (13.977) (214,598) n55.000^ f9.107.205^

1.000,000 3.738.410 2.499,152 1,000,000 l.OOO.OOO 141,701

2Lm

Total general revenues 9.476.554 Change in net assets 369.349 Net assets, beginning of year 6.822.331 Net assets, end of year $ 7.191.680

The accompanying notes are an integral part of these financial statements.

11

NEW ORLEANS TOXJRISM MARKETING CORPORATION (A Component Unit of tiie City of New Orleans) BALANCE SHEET - GOVERNMENTAL FUNDS DECEMBER 31,2008

General Fund

Special Revenue Fund-CDBG

Total

ASSETS Cash Hotel/motel taxes receivable RTA hotel taxes receivable Base funding receivable Otiier receivables Prepaid expense

$6,516,968 548,669 544,362 250,000 94,553 200

$

-0-0.0-0-0-0-

$6,516,968 548,669 544,362 250,000 94.553 200

Total assets

$7,954,752

$

-0-

$7,954,752

$ 129.956 613.407

$

-0-0-

$ 129.956 613.407

743.363

-0-

743.363

5,495,000 1.716.389

-0-0-

5,495,000 1,716.389

7.211.389

-0-

7.211.389

-0-

$7,954,752

LIABILITIES AND FUND BALANCE

Liabilities: Accounts payable and accrued expenses Due to outside agencies, net Total liabilities Fund Balance: Unreserved - designated (NOTE 12) Unreserved - undesignated Total fund balance Total liabilities and fund balance

$7,954,752

$

The accompanying notes are an mtegral part of these financial statements.

12

NEW ORLEANS TOURISM MARKETING CORPORATION (A Component Unit of the City of New Orleans) RECONCILIATION OF THE BALANCE SHEETGOVERNMENTAL FUNDS TO THE STATEMENT OF NET ASSETS DECEMBER 31,2008

Total fund balance-Governmental Funds

$7,211,389

Amounts reported for govemmental activities in the Statement of Net Assets are different because: Coital assets used in govemmental activities are notfinancialresources and therefore are not reported in the govemmental funds (NOTE 5): The cost of capital assets is Accumulated depreciation is

Long-temi liabilities are not due and payable in the current period therefore are not reported in the govemmental funds (NOTE 6): Compensated absences

$ 140,109 fl 08.5 051

31,604

(51.3131

Net assets of govemmental activities

$7.191.680

The accompanying notes are an integral part of these financial statements, 13

NEW ORLEANS TOURISM MARKETING CORPORATION (A Component Unit of the City of New Orleans) STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE-GOVERNMENTAL FUNDS FOR THE YEAR ENDED DECEMBER 31,2008

General Fund

Special Revenue Fund-CDBG

• Total

REVENUES $1,000,000 -03,738,410 .

2.499,152 1,000,000 1,000,000 141,701 97.291

Base funding - City of New Orleans Federal grant Hotel/motel taxes (net of collection fees) RTA hotel taxes Casino City lease agreement Casino hotel agreement Other revenue Interest income Total revenues

-03,810,609 -0-0-0-0-0-0-

$ 1,000,000 3,810.609 3,738,410 2,499,152 1,000.000 1,000,000 141,701 97.291

9.476.554

3.810.609

13.287.163

2,757,319 1.035,119 1,152,001 342,843 194,166 664,128 140,820 4,113 473,916 1.268,356 ' 57,670 400,722 120.912 100,000 6,105 214,598 155.000

-0-03,089,931 -0560,348 -0-0-0-0160,330 -0-0-0-0-0-0-

2,757,319 1,035,119 4,241,932 342,843 754,514 664,128 140,820 4,113 473,916 1,268,356 218,000 400,722 120,912 100,000 6,105 214,598 155.000

9.087.788

3.810.609

12.898.397

388,766

-0-

388.766

6.822.623

-0-

6.822.623

-0-

$ 7.211.389

$

EXPENDITURES Provision offimdingto outside agencies Agen^ and related fees Summer/general media Multicultural/Essence events Production Public relations Research Telemarketing Christmas media Interactive marketing Summer/museums media General and adminisU^tive Fulfillment Promotions/festival support Marketing technologies Special events Summer convention Total racpenditures Net change in fund balance Fund balance, beginning of year Fund balance, end of year

S7.211.389

•0-

$

The accompanying notes are an integral part of these financial statements.

14

NEW ORLEANS TOURISM MARKETING CORPORATION (A Component Unit ofthe City of New Orleans) RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES FOR THE YEAR ENDED DECEMBER 31,2008

Total net change in fund balance - Govemmental Funds

$388,766

Amounts reported for govemmental activities in the Statement of Activities are different because: The Govemmental Funds reported capital outiays as expenditures whereas in the Statement of Activities, these cost are depreciated over theh estimated lives: Depreciation expense (NOTE 5) Capital outiays (NOTE 5)

(13,977) 6,105

Long-term compensated absences are reported in the Govemment-Wide Statement of Activities, but they do not requke the iise of currentfinancialresources.

Therefore, compensated absences are not reported as expenditures in the Govemmental Funds (NOTE 6)

(11.5451

Change in net assets of govemmental activities

$369.349

The accompanying notes are an mtegral part of thesefinancialstatements.

15

NEW ORLEANS TOURISM MARKETING CORPORATION (A Component Unit ofthe City of New Orleans) NOTES TO THE FINANCIAL STATEMENTS

NOTE 1 -

Organizations and Operations: New Orleans Tourism Marketing Corporation (NOTMC) was organized January 1,1990. The objectives and purposes of NOTMC are as follows: o To continuously stimulate the hospitality and tourism industry of the City of New Orleans through regional, national and international advertising and marketing ofthe City of New Orleans as a tourist and convention site and a vacation destination; 0 To stimulate economic development in the City of New Orleans through the marketing and solicitation of conventions and trade shows throughout the United States and the World; and 0 To advance, promote and maintain tourism and trade hi the City of New Orleans through marketmg activities dhrected at the discretionary tourist or traveler through advertising, direct mailing, or other means.

NOTMC is administered by aBoard of Directors consisting of fifteen (15) members appointed as follows: 0 One (1) member appointed by the Mayor ofthe City of New Orleans; o Three (3) members appomted by the City Councilfi:omits members;

16

NEW ORLEANS TOURISM MARKETING CORPORATION (A Component Unit ofthe City of New Orleans) NOTES TO THE FINANCIAL STATEMENTS. CONTINUED

NOTE 1 -

Organization and Operations. Continued: 0 Three (3) members appointedfi:oma list of six (6) nominees submitted by the New Orleans Metropolitan Convention and Visitors Bureau; o Four (4) members appomtedfi:oma list of eight (8) nominees submitted by the Greater New Orleans Hotel/Motel Association; o One (1) member appointedfiroma list of two (2) nominees submitted by the New Orleans Multicultural Tourism Network, Inc.; o One (1) member appomtedfi'oma list of two (2) nominees submitted by the Preservation Resource Center; 0 One (1) member appointedfi-oma list of two (2) nominees submitted by the New Orleans East Economic Development Foundation; and 0 One (1) member appointedfiroma list of two (2) nominees submitted by tiie New Orleans Chapter ofthe Louisiana Restaurant Association.

NOTMC commenced operation on May 1,1991.

The accounting and reporting policies of NOTMC confonn to accounting principles generally accepted intiieUnited States of America as applicable to govemmental bodies.

17

NEW ORLEANS TOURISM MARKETING CORPORATION (A Component Unit ofthe City of New Orleans) NOTES TO THE FINANCIAL STATEMENTS, CONTINUED

NOIB 2 -

Summarv of Significant Accounting Policies: The following is a summary of the significant policies followed in the preparation of thesefinancialstatements.

A) Implementation of Governmental Accounting Standards Board Statements Duringtiiefiscalyear 2002, NOTMC adopted GASB Statement No. 34, Basic Fmancial Statements - and Management's Discussion and Analvsis for State and Local Govemments. as amended by GASB Statement No. 37 and No. 38, and applied those standards on a retroactive basis. GASB StatementNo. 34 established standards for extemalfinancialreporting for state and local govemments and requires that resources be classified for accounting and reporting purposes into the follovwng three net asset categories.

Invested m Capital Assets - consists of capital assets, net of accumulated depreciation.

Restricted Net Assets - result when constraints placed on net asset use are either extemally imposed by creditors, grantors, contributions, and the like, or imposed by law through constitutional provisions or enabling legislation. At December 31, 2008, NOTMC had no restricted net assets.

Unrestricted Net Assets - consist of net assets which do not meet the definition ofthe two preceding categories. Unrestricted net assets often are designated to mdicate that management does not consider them to be available for general operations. Unrestricted net assets often have constraints on resources which are imposed by management, but can be removed or modified.

18

NEW ORLEANS TOURISM MARKETING CORPORATION (A Component Unit ofthe City of New Orleans) NOTES TO THE FINANCIAL STATEMENTS. CONTINUED

NOTE 2 -

Summarv of Significant Accounting Policies. Continued: A) Implementation of Govemmental Accounting Standards Board Statements. Continued The Statement of Activities - demonstrates the degree to. which the direct expenses of a given function or segment are offset by program revenues. Direct expenses are those that are clearly identifiable within a specific function. Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit firom goods, services, or privileges provided by a given function and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function. Taxes and other items not meeting the definition of program revenues are instead reported as general revenue.

B) Reporting Entity NOTMC is a component unit ofthe City of New Orleans, the reportmg entity, as defined by the Govemmental Accountmg Standards Board pronouncement. The accompanying financial statements present information only on the funds maintamed by NOTMC and do not present information on the City of New Orleans, the general govemment services provided by tiiat govemmental unit, or the other govemmental units that comprise thefinancialreporting entity.

C) Funds NOTMC uses funds to maintam itsfinancialrecords duruigtiieyear. Fund accounting is designed to demonstrate legal compliance and to aid management by segregating transactions related to certain NOTMC functions and activities. A fund is defmed as a separate fiscal and accounting entity witii a self-balancmg set of accounts. The funds of NOTMC are classified as govemmental.

19

NEW ORLEANS TOURISM MARKETING CORPORATION (A Component Unit ofthe City of New Orleans) NOTES TO THE FINANCL\L STATEMENTS, CONTINUED

NOTE 2 -

Summarv of Significant Accounting Policies. Contuiued: C) Funds. Continued The govemmental fund's accounts for all ofNOTMC's general activities.

Thesefimdsfocus on the sources, uses, and balances of current financial resources. Expendable assets are assigned to the various govemmental funds accordmg to the purposes for which they may be used. Current liabilities are assigned to the funds fi'om which they will be paid. The difference between a govemmental fund's assets and liabilities is reported as fimd balance. In general, fimd balance represents the accumulated expendable resources which may be used tofinancefuture period programs or operations of NOTMC. The following is NOTMC's govemmental funds: General Fund - the operating fund of NOTMC and it accounts for all financial resources. The General Fund is available for any purpose provided it is expended or transferred in accordance with state and federal laws and according to NOTMC. Special Revenue Funds - accounts for the proceeds of specific revenue sources that are legally restricted to expenditures for specified purposes, or designated by NOTMC to be accounted for separately.

D) Measurement Focus/Basis of Accounting Govemment-Wide Financial Statements TGWFS) The Statement of Net Assets and the Statement of Activities display information aboutttiereporting govemment as a whole. These statements include all thefinancialactivities of NOTMC.

20

NEW ORLEANS TOURISM MARKETING CORPORATION (A Component Unit of the City of New Orleans) NOTES TO THE FINANCIAL STATEMENTS, CONTINUED

NOTE 2 -

Summary of Significant Accounting Policies. Continued: D) Measurement Focus/Basis of Accounting. Continued Govemment-Wide Financial Statements (GWESl Continued The GWFS were prepared using the economic resources measurement focus and the accmal basis of accounting. Revenues, e^qpenses, gains, losses, assets and liabilities resulting firom exchange or exchange-like transactions are recognized when the exchange occurs (regardless ofwhen cash is received or disbursed). Revenues, expenses, gains, losses, assets and liabilities resultingfi'omnonexchange transactions are recognized in accordance witii the requirements of GASB StatementNo. 33,Accounting and Financial Reportingfor Nonexchange Transactions.

Fund Financial Statements rFFS'^ Govemmental funds are accounted for using a current financial resources . measurement focus. With this measurement focus, only current assets and current liabilities are generally included on tiie balance sheet. The statement of revenues, e3q)enditures. and changes m fund balance reports on the sources (i.e. revenues and other financing sources) and uses (i.e., expenditures and otherfinancinguses) of currentfinancialresources. This approach differsfromtiiemanner ki which the govemmental activities of the governmental-wide statements and the statements for govemmental funds are prepared. Govemmental fund financial statements therefore mclude a reconciliation with brief explanations to better identify the relationship, between the government-wide statements and the statements for govemmental funds.

21

NEW ORLEANS TOURISM MARKETING CORPORATION (A Component Unit ofthe City of New Orleans) NOTES TO THE FINANCIAL STATEMENTS, CONTINUED

NOTE 2 -

Summarv of Significant Accounting Policies. Continued: D) Measurement Focus/Basis of Accounting. Continued Fund Financial Statements (FES'). Continued Fundfinancialstatements report detailed information about NOTMC, The focus of govemmentalfimdfmancial statements is on major funds rather than reportingfiindsby type. Bach major fimd is presented m a separate column. At December 31, 2008, tiie general fund and the special revenue-CDBG are the only major funds of NOTMC. Govemmental funds and the agency fund use the modified accmal basis of accounting. Under the modified accrual basis of accountmg, revenues are recognized when susceptible to accrual (i.e. when they become both measurable and available). Measurable means the amount oftransaction can be determmed and available means collectible within the current period or soon enough thereafter to pay liabilities ofthe current period. NOTMC considers all revenues available if they are collected within 60 days after the fiscal year. Expenditures are recorded when the related fund liability is incurred, except for interest and principal payments on general long-term debt which is recognized when due, and certain compensated absences and claims andjudgments which are recognized when the obligations are expected to be liquidated with expendable available financial resources.

22

NEW ORLEANS TOURISM MARKETING CORPORATION (A Component Unit ofthe City of New Orleans) NOTES TO THE FINANCIAL STATEMENTS, CONTINUED

NOTE 2 -

Summarv of Significant Accounting Policies. Continued: E) Budgetarv Data NOTMC follows these procedures m establishmg the budgetary data reflected in thesefinancialstatements: 1.

NOTMC is requu-ed to prepare an annual budget and submit it to the Board of Durectors.

2.

Upon review and completion of all action necessary to finalize the budget, it is then adopted by the Board of Directors prior to the commencement ofthe fiscal year to which the budget applies.

3.

Budgetary amendments involving the transfer of fimds from one program or function to another, or involvmg increases in ejq)enditures resultingfromrevenues exceeding amounts estimated, require the approval ofthe Board of Durectors.

4.

All budgetary appropriations lapse at the end ofthe fiscal year.

5.

The budget for the general fund expenditures is prepared on a basis consistent witii accounting principles generally accepted in the United States of America. Budgeted amoimts are as origuially adopted or as amended by the Board of Directors.

6.

The budget of the City of New Orleans' appropriations must be approved by the City of New Orleans.

23

NEW ORLEANS TOURISM MARKETING CORPORATION (A Component Unit ofthe City of New Orleans) NOTES TO THE FINANCL\L STATEMENTS, CONTINUED

NOTE 2 -

Summarv of Significant Accounting Policies. Contmued: F)

Cash Cash includes amounts in interest-bearing demand deposits. Under state law, NOTMC may deposit funds m demand deposits, interest-bearing demand deposits, money market accounts, or time deposits with state banks organized under Louisiana law and national bajoks havmg their principal offices in Louisiana.

G) Compensated Absences Unused vacation leave may be accumulated up to a specified maximum and is paid at the time of termination from NOTMC employment.

NOTMC is not obligated to pay for unused sick leave if an employee terminates prior to retirement.

NOTMC accmes accumulated unpaid compensated absences when eamed (or estimated to be eamed) by the employee. The non-current portion (the amount estimated to be used in subsequent fiscal years) for govemmental fund is maintained separately and represents a reconciling item between the fund and govemment-v^dde presentation.

H) Income Taxes NOTMC is exempt from taxation under Section 501(a) ofthe Intemal Revenue Code.

I)

Capital Assets Capital assets are capitalized at historical cost or estimated cost if historical cost is not available. Donated assets are recorded as capital assets at their estimated fair market value at the date of donation.

NOTMC mamtains a threshold level of $500 or more for capitalizing capital assets.

24

NEW ORLEANS TOURISM MARKETING CORPORATION (A Component Unit ofthe City of New Orleans) NOTES TO THE FINANCIAL STATEMENTS, CONTINUED

NOTE 2 -

Summarv of Significant Accounting Policies. Continued: I)

Capital Assets. Continued Capital assets are recorded in the GWTS. but are not reported in the FFS, Fumiture and equipment are depreciated using the straight-line method over three (3) to ten (10) years estimated useful lives.

J)

Use of Estimates The preparation of fmancial statements in confonnity with accoimting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date ofthefinancialstatements and the reported amounts of revenues and e5q)enses during the reporting period. Actual results could differ from tiiose estimates.

N0TE3-

Cash: NOTMC had cash in demand deposit accounts totaling $6,516,968 (book balances) at December 31,2008.

These deposits are stated at cost, which approximates market. Under state law, these deposits (or the resulting bank balances) must be secured by federal deposit insurance or the pledge of securities owned by the fiscal agent bank.

25

NEW ORLEANS TOURISM MARKETING CORPORATION (A Component Unit ofthe City of New Orleans) NOTES TO THE FINANCIAL STATEMENTS, CONTINUED

NOTE 3 -

Cash, Contmued: The market value ofthe pledged securities plus the federal deposit insurance must at all times equal the amount on deposit with the fiscal agent bank.

These securities are held in the name ofthe pledging fiscal agent bank in a holding or custodial bank that is mutually acceptable to both parties. At December 31, 2008, NOTMC has $6,563,070 in deposits (collected bank balances). These deposits are securedfromrisk by $250,000 of federal deposit insurance and $6,488,185 of pledged securities held by a custodial bank in the name of the fiscal agent bank.

Custodial credit risk is the risk that, in event of a failure offinancialinstitution or counterparty, NOTMC would not be able to recover its deposits, mvestments, or collateral securities that are m the possession of an outside party. NOTMC's deposits are not subject to custodial credit risk since they are deposited in a stock-owned federally insured depository institution organized under the laws ofthe State of Louisiana or under laws ofthe United States, as required by the Revised Statutes.

NOTE 4 -

Sources of Revenue of New Orleans Tourism Marketing Corporation: The major sources ofrevenue are base funding, hotel occupancy privilege tax, RTA hotel tax, casmo funding, federal grant and other revenue as discussed below: A) Base Funding - Pursuant to New Orleans City Council Ordinance No. 18358, Base Funding for NOTMC shall be the amount of funds to be received from the City of New Orleans and/or other public or nonprofit entities, and/or private contributions.

Fortiieyear ended December 31,2008, NOTMC eamed $1,000,000 in Base Fundmg.

26

NEW ORLEANS TOURISM MARKETING CORPORATION (A Component Unit ofthe City of New Orleans) NOTES TO THE FINANCLM. STATEMENTS, CONTINUED

NOTE 4 -

Sources of Revenue of New Orleans Tourism Marketing Corporation.

Continued: B) Hotel Occupancv Privilege Tax - The Hotel Occupancy Privilege Tax (effective November 1,1990) is levied upon persons for the privilege of occupymg hotel rooms withm Orieans Parish in the amount offiflycents ($0.50) per occupied hotel room per night for hotels containing from three (3) to two hundred ninety-nine (299) rooms and one dollar ($1.00) per occupied hotel room per night for hotels containing three hundred (300) or more rooms.

Every hotel operator subject to this tax shall make reports on the previous month's busmess on or before the twentieth day ofthe foUowmg month to the City of New Orleans.

The knposition and collection ofthe Hotel Occupancy Privilege Tax shall be repealed and discontinued upon the occurrence of any of the following: 0

The disposition or liquidation of NOTMC; or

o

The specific decertification of NOTMC as a nonprofit economic development corporation by the New Orleans City Coxmcil.

For tiieyearendedDecember31,2008,NOTMC eamed $3,738,410(net of collection fees of $76,294)fromtiieHotel Occupancy Privilege Tax. C) RTA Hotel Tax - As provided by the agreement for services and cooperative economic endeavor by and between the Regional Transit Autiiority (RTA) and NOTMC, NOTMC shall receive a sum of 40% of tiiefirst$7,200,000 oftiieRTA's 1% general sales and use taxes, applied to hotels in Orieans Parish, actually received by tiie RTA each calender year not to exceed $2,880,000.

27

NEW ORLEANS TOURISM MARKETING CORPORATION (A Component Unit ofthe City of New Orleans) NOTES TO IHE FINANCIAL STATEMENTS. CONTINUED

NOTE 4 -

Sources of New Orleans Tourism Marketmg Corporation. Contuiued: C) RTA Hotel Tax. Continued In consideration ofthe payments to be made by the RTA to NOTMC, NOTMC shall perform tiie foUowmg marketing services: o Promote the use of the RTA's transit services to tourist or business travelers; o Consult with the RTA regarding information or promotion ofthe RTA's transportation services available to tourist or business travelers; 0 Assist the RTA and other agencies to secure funding for existing and proposed streetcar and lightrail projects; and 0 Provide funding, not to exceed 3.45% of the RTA hotel tax received from the RTA, to the Mayor's Office of Tourism and Arts who shall make all reasonable efforts to use such funds to feature or enhance tourism, public transportation and other goals and objectives ofthe agreement.

Additionally, NOTMC shall allocate and dedicate 5 0% ofthe RTA hotel tax received from RTA to the Morial Convention Center Expansion Transit Fund (the Transit Fund), The funds paid to the Transit Fund and related eamings must be used for the benefit ofthe Phase TV Convention Center expansion project admmistered by the Ernest N. Morial New Orleans Exhibition Hall Authority.

D) Casino City Lease Agreement - According to the lease agreement among the City of New Orleans (the City) and the Rivergate Development Corporation and the Jazz Casmo Company (the Casuio), tiie Casino is required to make an annual contribution of $1,000,000 to the destination marketing program ofthe City for the jomt benefit of tiie City and tiie Casino in order to promotettieCity andtiieCasino as destinations. The City has utilized NOTMC to conducttiiedestination marketing program on behalf ofthe City.

28

NEW ORLEANS TOURISM MARKETING CORPORATION (A Component Unit ofthe City of New Orleans) NOTES TO THE FINANCML STATEMENTS, CONTINUED

NOTE 4 -

Sources of New Orleans Tourism Marketing Corporation. Continued: E)

Casino Hotel Agreement - The Casino has agreed to make payments, annually, for additional marketing monies to be dedicated to NOTMC to market the entire City. These annual payments are in addition to the above amounts required by the lease agreement.

F)

Federal Grant - Community Development Block Grant funds awarded to NOTMC to influence domestic leisure travelers to visit New Orleans, m post Katrma New Orleans and drive visitor spending.

G) Other Revenue - Other revenue mcludes sales of advertising and discount coupons placed in tourism guides produced by NOTMC, sales of cosponsored and shared advertismg placed by NOTMC m national print media and sales of advertismg and linking services on NOTMC's Internet web site.

NOTE 5 -

Capital Assets: Capital assets and depreciation activity as of and for the year ended December 31,2008 is as follows: Beginning Balance

Additions

Fumiture and equipment $134,004 Accumulated depreciation (94.528)

$ 6,105 (13.977)

$-0- $ 140,109 =Qz (108.505)

$ (7.872)

$-0-

Deletions

Ending Balance

Assets

Net capital assets

$ 39.476

29

$ 31.604

NEW ORLEANS TOURISM MARKETING CORPORATION . (A Component Unit ofthe City of New Orleans) NOTES TO THE FINANCIAL STATEMENTS, CONTINUED

NOTE 6 -

Long-Term Debt: 'i

A summary ofthe changes in long-term debt is as follows:

NOTE 7 -

Description

January 1, 2008

Additions

December 31, 2SQS

Compensated absences

$39.768

$11.545

$51.313

Transactions with Outside Organizations: Provision of Funding According to the Council of tiie City of New Orieans' Ordinance (Council Ordinance) to adopt NOTMC's Tourism Promotion Program for 2008 and as provided bytiieRTA Hotel Tax Agreement, NOTMC provided funding to ttie following organizations.

RTA Hotel Tax Agreement New Orleans Metropolitan Convention and Visitors Bureau

Council Ordinance

Total

-0-

$1,066,142

$1,066,142

-0-

355,381

355,381

1,249,576

-0-

1,249,576

86.220

-0-

86.220

$1,335,796

$1,421,523

$2,757,319

$

New Orleans Multicultural Tourism Network, Inc. Emest N. Morial New Orleans Exhibition Hall Authority Mayor's OfBce of Tourism and Arts

30

NEW ORLEANS TOURISM MARKETING CORPORATION (A Component Unit ofthe City of New Orleans) NOTES TO THE FINANCLU STATEMENTS, CONTINUED

NOTE 8 -

Operating Lease: NOTMC has an operating lease for office space. For this lease, NOTMC has, as of December 31, 2008, a contractual agreement requiring the foUowmg rental payments: Fiscal Year Ending December 31.

Facilitv

2009 2010

$49,755 24.878 $74.633

Total Lease expense for the current year amounted to $61,697,

NOTE 9 -

Risk Management: NOTMC is exposed to various risks of loss related to torts; theft of; damage to and destruction of assets for which NOTMC carries commercial insurance.

Liabilities are reported when it is probable that a loss has occurred and the amount ofthe loss can be reasonably estimated.

NOTE 10 - Fair Value of Financial Instruments: The estimated fair value of all significant financial instruments have been determined by utilizing available market information and appropriate valuation metiiodologies. NOTMC considers the carrying amounts of cash and receivables to be fair value.

31

NEW ORLEANS TOURISM MARKETING CORPORATION (A Component Unit ofthe City of New Orleans) NOTES TO THE FESFANCIAL STATEMENTS. CONTINUED

NOTE 11-

Due to Outside Agencies . Net: At December 31,2008, the net amount due to outside agencies is as follows:

Emest N. Morial New Orleans Exhibition Hall Autiiority Mayor's Office of Tourism and Arts New Orleans Metropolitan Convention and Visitors Bureau New Orleans Multicultural Tourism Network, Inc. Total

Amount Due To At December 31, 2007

Provision Of Funding Ejqienditure At December 31, â&#x20AC;˘ 2008

Payments Made To Outside Agencies At December 31, 2008

Total Net Amount Due To At December 31, 2008

$494,096

$1,249,576

$(1,471,491)

$272,181

34,093

86,220

(101,533)

18,780

252,735

1,066,142

(1,077,043)

241,834

84.245

355.381

^359.014^

80.612

$865,169

$2.757.319

$(3.009.08n

$613.407

32

NEW ORLEANS TOURISM MARKETING CORPORATION (A Component Unit ofthe City of New Orleans) NOTES TO THEFINANCD^L STATEMENTS, CONTINUED

NOTE 12 - Fund Balance Designations: Unreserved - Designated Fund Baiance Fund balance designations totaling $5,495,000 consist of the following at December 31,2008:

Purpose

Amount

Various media costs 2009 administrative costs Broadcast projects and special promotions Reserve for admmistrative costs Reserve.for emergency marketing costs

$1,100,000 45,000 850,000 1,500,000 2.000,000

Total .

$5.495.000

33

REQUIRED SUPPLEMENTARY INFORMATION

NEW ORLEANS TOURISM MARKETING CORPORATION (A Component Unit ofthe City of New Orleans) BUDGETARY COMPARISON SCHEDULE - GENERAL FUND FOR THE YEAR ENDED DECEMBER 31,2008

Variance with Budget Positive fNeeative")

Orieinal Budeet

Actual Amounts

$1,000,000 3,500,000 2,000,355 1,000,000 1,000,000 -0-0-

$ 1,000,000 3,738.410 2,499,152 1.000,000 1.000,000 141,701 97.291

8.500.355

9.476.554

976.199

2,419.190 963.120 225,000 205,000 350.000 573,199 1.451,749 125,000 -0865.183 -01,511,356 361.558 100,000 -0100,000 -0-

2,757,319 1,035,119 214,598 1,152,001 342,843 194.166 664.128 140,820 4,113 473,916 57,670 1,268,356 400,722 120,912 6,105 100,000 155.000

(338,129) (71,999) 10,402 (947,001) 7,157 379,033 787.621 (15,820) (4,113) 391.267 (57,670) 243.000 (39.164) (20,912) (6,105) -0(155.000^

9.250.355

9.087.788

162.567

Net change infimdbalance

(750,000)

388,766

1,138,766

Fund balance, beginning of year

5.470.973

6.822.623

1.351.650

$4.720.973

$7.211.389

$2.490.416

REVENUES Basefiinding- City of New Orleans Hotei/Motel taxes (net of collection fees) RTA hotel taxes Casino City lease agreement Casino hotel agreement Other revenue Interest income Total revenues

$

-0238,410 498,797 -0-0141,701 97.291

EXPENDl'l ORES FrovisiOD offimdingto outside agencies Agency and relied fees ' Special events Summer/general media Multicultural/essence events Production Public relations Research Telemarketing Christmas media Summer/museum media Interactive marketing General and administrative Fulfillment Marketing technologies Promotions/festival support Summer convention Total expenditures

Fund balance, end of year

See Independent Auditors' Report on Supplementary Information,

34

NEW ORLEANS TOURISM MARKETING CORPORATION (A Component Unit of the City of New Orleans) BUDGETARY COMPARISON SCHEDULE - SPECIAL REVENUE FUND - CBDG FOR THE YEAR ENDED DECEMBER 31,2008

Actual Amounts

Variance with Budget Positive (Negative)

$3.650.000

$3.810.609

$ 160.609

3.650.900

3.810.609

160.609

386.801 3,063,199

560,349 3,089,931 160-329

(173,548) (26,732) 39.671

imm.

(160.609)

Original Budget

REVENUES Community Development Block Grant Tota! revenues

EXPENDITURES Production Summerygeneral media Summer/museum me(Ua

200.000

Total expenditures Net change infimdbalance

3.650.000 -0-

Fund balance, beginning of year

-0-

-0-

-0-

-Q-

lO:

Fund balance, end of year

-0-

$.

-:ÂŁb

See Independent Auditors' R^ort on Supplementary Information.

35

SUPPLEMENTARY INFORMATION

P-

NEW ORLEANS TOURISM MARKETING CORPORATION (A Component Unit ofthe City of New Orleans) SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS FOR THE YEAR ENDED DECEMBER 31,2008

FEDERAL GRANTOR PROPTRAM TITLE

FEDERAL CFDA NUMBER

U. S. Department of Houskig and Urban Development Passed Through Louisiana Department of Culture, Recreation and Tourism: Community Development Block Grant

14.228

Total U. S. Department of Housing and Urban Development

$3.810.609 S.^lO.m

Total Expenditures of Federal Awards

NOTE:

FEDERAL EXPENDITURES

$3.810.609

The accompanying schedule of expenditures of federal awards includes the federal grant activity of NOTMC and is presented on the accrual basis of accounting. The infonnation in this schedule is presented in accordance wdth the requirements of OMB Chrcular A-133, Audits of States, Local Govemments, and Non-Profit Organizations. Therefore, some amounts presented in this schedule may differfiromamounts presented in, or used m the preparation of, the basic financial statements.

36

'runo & Tervalon UP 'Certified Public Accountants MichaeJ B. Bruno, CPA Alclde J. Tervalon, Jr., CPA Waldo J. Moret, Jr., CPA Paul K. Andoh, Sr., CPA Joseph A. AkanjI, CPA

Member American Institute of ,CertIfied Public Accountants Society of Louisiana Certified Public Accountants

INDEPENDENT AUDITORS' REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLL^CE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED TN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS

To the Board of Directors of fhe New Orleans Tourism Marketing Corporation (A Component Unit ofthe City of New Orleans) New Orleans, Louisiana We have audited the financial statements of New Orleans Tourism Marketing Corporation (NOTMC) (A Component Unit of the City of New Orleans) as of and for the year ended December 31,2008, and have issued our reporttiiereondated April 3,2009.

We conducted our audit m accordance with auditing standards generally accepted in the United States of America and fhe standards applicable to financial audits contained m Government Auditing Standards, issued by the Comptroller General ofthe United States.

Intemal Control over Financial Reporting In planning and performing our audit, we considered NOTMC's intemal control over financial reporting as a basis for designing our auditing procedures for the purpose of ejcpressing our opinion on the fmancial statements, but not for fhe purpose of expressing an opinion on the effectiveness of NOTMC's intemal control over financial reporting.

Accordingly, we do not express an opinion on the effectiveness of NOTMC's intemal control overfinancialreporting.

37 4298 ELYSIAN HELDS AVENUE NEW ORLEANS, LA 70122 (504)284-8733 FAX (504) 284-S298

6424 LAKEOVER RD., SUITE A JACKSON, MS 39213 (601) 366-2344 FAX (601) 366-8440

INDEPENDENT AUDITORS' REPORT ON INTERNAL CONTROL OVER FINANCLVL REPORTING AND ON COMPLLWCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS (CONTINUED)

Internal Control Over Finandal Reporting. Continued A control deficiency exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect misstatements on a timely basis. A significant deficiency is a control deficiency, or combination of control deficiencies, that adversely affects NOTMC's ability to mitiate, authorize, record, process, or report financial data reliably m accordance with generally accepted accounting prmciples, such that there is more than a remote likelihood that a misstatement ofNOTMC's financial statements that is more than inconsequential will not be prevented or detected by NOTMC's intemal control.

A material weakness is a significant deficiency, or combination of significant deficiencies, that results in more than a remote likelihood that a material misstatement of the financial statements mil not be prevented or detected by NOTMC's mtemal control.

Our consideration of intemal control over financial reporting was for the limited puipose described in the first paragraph of this section and would not necessarily identify all deficiencies in intemal control that might be significant deficiencies or materigd weaknesses.

We did not identify any deficiencies in mtemal control over financial reporting that we consider to be material weaknesses, as defined above.

JBruno & Tervalon LLP WWCertified Public Accountants

^^

INDEPENDENT AUDITORS' REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLLWCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS (CONTINUED)

Compliance and Other Matters As part of obtainmg reasonable assurance about whether NOTMC'sfinancialstatements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance v/ith which could have a direct and material effect on the determination offinancialstatement amounts. However, providing an opinion on compliance with those provisions was not an obj ective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.

This report is intended solefy for the information and use ofNOTMC's Board, management, the City of New Orleans, the Legislative Auditor for the State of Louisiana, and federal awarding agencies and pass-through entities and is not mtended to be and should not be used by anyone other than these specified parties. Under Louisiana Revised Statute 24:513, this report is distributed by the Legislative Auditor as a public document.

BRUNO & TERVALON LLP CERTIFIED PUBLIC ACCOUNTANTS April 3,2009

fBruno& Tervalon LLP Certified Public Accountants

39

mno & Tervalon LLP Certified Public Accountants Michael B. Bruno, CPA Aicide J. Tervalon. Jr., CPA Waldo J. Moret, Jr., CPA Paul K. Andoh, Sr., CPA Joseph A. Alonji, CPA

Member American Institute of Certified Pubiic Accountants Society of Louisiana Certified Public Accountants

INDEPENDENT AUDITORS' REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133

To the Board of Directors of die New Orleans Tourism Marketing Corporation (A Component Unit of the City of New Orleans) New Orleans, Louisiana

Compliance We have audited the compliance of New Orleans Tourism Marketing Corporation (NOTMC) (A Component Unit ofthe City of New Orleans), with the types of compliance requirements described in the U. S. Office ofManagement and Budget (OMB) Circular A133 Compliance Supplement that are applicable to its major federal program for the year ended December 31,2008. NOTMC's major federal program is identified m the Sunmiary of Auditors' Results section of tiie accompanying Schedule of Findings and Questioned Costs. CompUance with the requirement? of laws, regulations, contracts and grants applicable to its maj or federal program istiieresponsibility of NOTMC*s management. Our responsibility is to express an opinion on NOTMC's compliance based on our audit.

We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to fuiancial audits contained m Government Auditing Standards, issued by the Comptroller General of the United States; and OMB Cu-cular A-133, Audits of States. Local Governments, and NonProfit Organizations. Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types

40 4288 ELYSIAN RELDS AVENUE NEW ORLEANS, LA 70-^22 (504) 284-8733 FAX (504) 284-8296

6424 LAKEOVER RD., SUITE A JACKSON, MS 39213 (601)366-2344 FAX (601) 366-8440

INDEPENDENT AUDITORS' REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133 (CONTINUED)

Compliance. Continued of compliance requirements referred to above that could have a durect and material effect on a major federal program, occurred. An audit includes examining, on a test basis, evidence about NOTMC's compliance with those requkements and performing such other procedures as we considered necessary in the ckcumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination of NOTMC's compliance with those requirements.

In our opinion, NOTMC complied, in all material respects, vrith the requbements referred to above tiiat are applicable to its major federal program for the year ended December 31, 2008.

Internal Control Over Compliance The management of NOTMC is responsible for establishing and maintaining effective intemal control over compliance with the requirements of laws, regulations, contracts, and grants applicable to federal programs. In planning and performing our audit, we considered NOTMC's intemal control over compliance with the requirements that could have a direct and material effect on a major federal program in order to determine our auditing procedures for the purpose of expressing our opinion on compliance, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not e?q)ress an opinion on the effectiveness of NOTMC's intemal control over compliance.

A control deficiency in NOTMC's intemal control over compliance exists whoi the design or operation of a control does not allow management or employees, in tiie normal course of perfomiing then assigned fimctions, to prevent or detect noncompliance witii a type of compliance requirement of a federal program on a timely basis. A significant deficiency is acontrol deficiency, or combination of control deficiencies,tiiatadversely affects NOTMC's ability to administer a federal program suchtiiattiiereis more than a remote likelihood tiiat noncompliance witii a type ofcompliance requirement of a federal program that is more tiian inconsequential will not be prevented or detected by NOTMC's mtemal control.

m n o & Tervalon ULP Certified Public Accountants

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INDEPENDENT AUDITORS' REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133 (CONTINUED)

A material weakness is a significant deficiency, or combination of significant deficiencies, that results in more than a remote likelihood that material noncompliance with a type of compliance requirement of a federal program will not be prevented or detected by NOTMC's intemal control.

Our consideration of intemal control over compliance was for the limited purpose described m tiie first paragraph of this section and would not necessarily identify all deficiencies in intemal control that might be significant deficiencies or material weaknesses. We did not identify any deficiencies in intemal control over compliance that we consider to be material weaknesses, as defined above.

This report is intended solely for the information and use ofNOTMC's Board, management, the City of New Orleans, tiie Legislative Auditor for the State of Louisiana, and federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties. Under Louisiana Revised Statute 24:513, this report is distributed by the Legislative Auditor as a public document.

V

BRUNO & TERVALON LLP CERTIFIED PUBLIC ACCOUNTANTS April 3,2009

runo & Tervalon Lij^ Certified Public Accountants

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NEW ORLEANS TOURISM MARKETING CORPORATION (A Component Unit ofthe City of New Orleans) SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR THE YEAR ENDED DECEMBER 31,2008

We have audited the financial statements of New Orleans Tourism Marketing Corporation (A Component Unit ofthe City of New Orleans) as of and for the year ended December 31,2008, and have issued our report thereon dated April 3,2009. We conducted Cur audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable tofinancialaudits contained in Government Auditing Standards, issued by the Comptroller General ofthe United States. Our audit ofthe financial statements as of December 31,2008 resulted in an unqualified opinion.

1.

Summary of Auditors' Results A.

Significant deficiencies in intemal control were disclosed by the audit of the financial-statementsi^NoneReported -Material weaknesses:. N c ,.

B.

Noncompliance which is material to the financial statements: No.

C.

Significant deficiencies in intemal control over major programs: None Reported Material weaknesses: Ufi-

D. The type of report issued on compliance for major programs: Unqualified.

E.

Any audit findmgs which are required to be reported under section 501(a) of OMB Circular A-133: Nfi.

F.

Major program: U.S. Department of Housing and Urban Development: Community Development Block Grant (CFDA No. 14:228)

G. Dollar threshold used to distinguish between Type A and Type B programs$300.000.

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NEW ORLEANS TOURISM MARKETING CORPORATION (A Component Unit ofthe City of New Orleans) SCHEDULE OF FINDINGS AND QUESTIONED COSTS, CONTINUED FOR THE YEAR ENDED DECEMBER 31,2008

1.

Summary of Auditors' Results. Continued H. Auditee qualified as a low-risk auditee imder section 530 of OMB Chrcular A133: M I.

2.

A management letter was issued: Mo.

Financial Statement Findings No matters were reported.

3.

Federal Award Findings and Ouestioned Costs No matters were reported.

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NEW ORLEANS TOURISM MARKETING CORPORATION (A Component Unit ofthe City of New Orleans) SCHEDULE OF PRIOR YEAR FINDINGS

Section I - Intemal Control and Compliance Material to the Financial Statements Nofindingswere reported.

Section n - Intemal Control and Compliance Material to Federal Awards Not applicable.

Section m - Management Letter No comments were reported.

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